M. Abbas & CO. Vs ACIT (ITAT Mumbai)
Mumbai ITAT quashed reassessment proceedings holding that failure to supply the actual recorded reasons for reopening vitiates the entire assessment.
The Tribunal observed:
- The AO had only provided a “gist/text of reasons” instead of the actual recorded reasons for reopening
- This violated the mandatory requirement laid down by the Supreme Court in GKN Driveshafts
- Without proper supply of reasons, the assessee was deprived of the right to object, breaching principles of natural justice
The ITAT held that:
- Recording and supplying reasons is the foundation of jurisdiction u/s 147
- Mere communication of summary/gist is not a valid substitute
- Such procedural lapse renders the entire reassessment invalid
Accordingly, the Tribunal:
- Quashed the reassessment proceedings u/s 147 r.w.s. 143(3)
- Set aside the CIT(A)’s order
- Declared that all other issues become academic
The appeal was allowed in full, reaffirming that non-supply of reasons is fatal to reopening jurisdicti
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The captioned appeal is preferred by the assessee challenging the order of Commissioner of Income Tax (Appeals), Mumbai – 36[“the Ld. CIT(A)] dated 16.12.2014 for the assessment year (AY) 2009-10, arises from assessment order u/s 143(3) r.w.s 147 of the Income Tax Act, 1961 (“the Act”) dated 28.02.2014. The grounds of appeal raised by the assessee are as under:
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